The Parent Company files for bankruptcy
The Parent Company and nine of its subsidiaries, including eToys.com and BabyUniverse.com, have filed for Chapter 11 bankruptcy in the US Bankruptcy Court in Wilmington, DE.
“This action is an unfortunate but necessary and responsible step to preserve the company's value for our stakeholders in light of the ongoing challenging retail environment,” said Michael Wagner, CEO of The Parent Company, in a statement.
The Parent Company is working with investment banking firm Oppenheimer & Co. to look at strategic alternatives, including a sale of some or all of the company's businesses. The company's Chapter 11 counsel is Pachulski Stang Ziehl & Jones LLP, and the company's financial adviser is Clear Thinking Group LLC.
In addition, on December 24, the company received a Nasdaq Staff Deficiency Letter notifying the company that it was not in compliance with the requirements for continued listing set forth in Nasdaq Marketplace Rule 4310(c)(14) because of the company's failure to timely file its Quarterly Report on Form 10-Q for the period ended November 1.
The company has 60 days, until February 23, to submit a plan to Nasdaq to regain compliance. Following any such submission, Nasdaq may provide the company with up to 180 days (until June 22) to regain compliance.
In November, The Parent Company launched Toys.com as a shopping comparison site for toys. Users were able to search by item and see results showing the different retailers offering what they're looking for. At that time, Wagner said Toys.com had the participation of all but one of the major toy retailers.